Natural gas prices continued to show weakness and sharply declined during recent weeks. On the other hand natural gas storage level continues to drop, even though the levels are still above the levels recorded in past years.
Here is a summary of the recent U.S natural gas market info collected by the EIA for the week ending on December 23rd:
Natural Gas Storage
The underground natural gas storage (Billion Cubic Feet) declined for the fifth consecutive week; last week by 2.23% or by 81 Bcf; the natural gas storage reached 3,548 billion cubic feet for all lower 48 states; the current natural gas storage is 13.7% above the 5-year average, and is 9.1% above the storage level during the same week in 2010. The higher than normal levels of natural gas storage might explain the ongoing decline in natural gas prices despite the drop in storage.
The sharp decline in storage was primarily due to a 53 Bcf extraction from the Eastern region natural gas storage.
In the following chart are the developments of natural gas storage (weekly figures) and Henry Hub natural gas prices during 2010-2011. During last week the Henry Hub spot price declined by 1.3% to a weekly average price of $3.04/mmbtu. The Henry Hub price was $1.05/mmbtu below its price level the same week in 2010.
Nymex Henry Hub Future Price (short term delivery) declined during last week by 1.63% and reached on Friday $3.11/mmbtu; its average daily change was -0.54%, and its weekly average price was 1.63% below the previous week’s average price.
To sum up, natural gas storage and prices declined during the week of December 23rd.
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